Budapest-based Trigranit has joined a growing group of companies in Central and Eastern Europe and Russia which are freezing new developments. The company is cutting its EUR 8 bn development pipeline by half and is considering postponing investments in remaining schemes by up to five years due to the worsening financial crisis. Plaza Centers, the emerging markets shopping centre developer, said it could freeze up to 26 of its 32 projects, or over 81% of its development pipeline, in light of the 'extraordinary market conditions.'
Budapest-based Trigranit has joined a growing group of companies in Central and Eastern Europe and Russia which are freezing new developments. The company is cutting its EUR 8 bn development pipeline by half and is considering postponing investments in remaining schemes by up to five years due to the worsening financial crisis. Plaza Centers, the emerging markets shopping centre developer, said it could freeze up to 26 of its 32 projects, or over 81% of its development pipeline, in light of the 'extraordinary market conditions.'
Meanwhile Russian billionaire Chalva Tchigirinski, who has built an empire based on oil and real estate, said in early December that its property arm RussianLand was suspending the construction of the 612-metre Russia Tower due to financing problems. A week later, Tchigirinski’s oil group Sibir Energy unveiled a $340 mln (EUR 265 mln) plan to rescue its key shareholder who has seen the value of his investments plummet in the wake of the credit crisis. The oil company plans to acquire a portfolio of 10 hotels and distressed land projects from the oil tycoon.
RTM Group has temporarily suspended investment in projects that are still at an early stage and said it plans to sell up to $300 mln (EUR 240 mln) of properties to reduce debt. Russian developer Sistema-Hals is also considering disposing of properties that produce less than a 20% return on investment.
This story appears in the December edition of PropertyEU Magazine. Click on the link below to subscribe.
